Despite heavy investments of money, resources and personnel to develop its own search engine and search ad network, Microsoft hasn't been able to come close to matching the levels of online ad revenue Google and Yahoo have achieved. It is painfully clear that Microsoft has failed to benefit as much as it should have from the surge in online ad spending of recent years.

Traffic to Microsoft's Web sites is strong. In fact, Microsoft consistently ranks first in Web site visitors worldwide. However, Microsoft hasn't monetized this traffic properly.

Moreover, Microsoft hasn't been able to compete effectively for traffic in the search engine market, where Google rules, and this has affected its ability to take advantage of search engine ads, which make up about 40 percent of U.S. online ad spending.

In December, Microsoft's share of U.S. search engine queries was 10.5 percent, while Google nabbed 47.3 percent, according to comScore Networks. In July 2005, Microsoft's U.S. search engine query share stood at 15.5 percent and Google's at 36.5 percent, according to comScore.

After peaking at $US8.2 billion in 2000, U.S. online ad spending fell in 2001 and 2002, but it began regaining lost ground in 2003. In 2004 the market finally broke the 2000 record, ending with $US9.6 billion in online ad spending. Growth rates in recent years have been in the 30 percent to 40 percent range. Online ad spending in the U.S. reached an estimated $US16.8 billion in 2006, a growth of 34 percent compared with 2005, according to the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC).

DoubleClick, founded in 1996, serves ad buyers such as ad agencies and corporate marketers, and ad sellers such as Web site publishers. It has two main divisions. Its Dart division provides tools and services to both buy and sell advertising, primarily display and rich media ads. Meanwhile, the Performics division focuses on search engine marketing, commonly based on the pay-per-click ads in which Google specializes.